Sept. 7, 2008--Fannie Mae and Freddie Mac collapse and are nationalized; they were formed in 1968 and 1970 respectively as privately owned GSEs (Government Sponsored Enterprises) to purchase and securitize mortgages to assure availability of home-buyer loans

Sept. 16, 2008--American International Group (AIG), an enormous global insurance company with considerable long-term assets, threatens to fail due to illiquidity from raised capital requirements due to downgrade of AA bond ratings; receives $85 billion government credit for 80% of equity

Sept. 25, 2008--Washington Mutual (WaMu), the largest U.S. savings and loan association, goes into receivership after 10-day run-on-the-bank withdrawals total $16.4 billion

Sept./Oct. 2008--Wachovia, the 4th largest bank-holding company in the U.S., looks weak; potential sale to Citigroup falls through

Dec. 31, 2008--Wachovia, continuing weak, is purchased by Wells Fargo; a few days later Moody's downgrades Wells Fargo because of Wachovia acquisition

...... The Remedies...

(1) let big corporations fail if they must, but in an orderly way--...nationalize them (to limit the spreading and protect the guts of the systems),...replace the management,...sell off valuable assets, and...hold weak assets for calmer times...(shareholders lose money; creditors do not)

(2) break up (early) any corporations that are "too big to be allowed to fail"

(3) regulate rating agencies--and forbid bond-issuers from paying for ratings (these should be paid for by the borrowers or the government)